Losses to the economy of great Britain after leaving the EU are estimated by different experts at the level of from 3 to 9% of GDP. In the area of special risk — industry, agriculture and the financial sector. However, some companies are already changing their residence to British, Irish or German. Meanwhile, the United Kingdom is unable to determine the terms of withdrawal from the EU. The Parliament rejected the possibility of breccia without signing a deal with Brussels lawmakers also refused to ratify the draft agreement. What consequences can expect the UK and EU at RT.

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  • © Toby Melville

London doesn’t want to leave the EU without agreement on the terms of breccia because the losses in this case will be huge. The economy may receive less 9.3% of GDP in the next 15 years. Such an assessment itself, the British government brought in a report prepared in November of last year.

The official date of a British exit from the European Union — March 29. However, at the moment the parties have not agreed on the terms of brexia. On the eve of the British Parliament rejected the possibility of separation without concluding a deal with the EU. Earlier, the legislators refused to ratify the latest version of the agreement is the result of negotiations between the European Union and the government of Theresa may.

Closing the deal with the EU would reduce the loss of the UK economy to 3.9% of GDP, however, the agreement was previously rejected by the Parliament.

The rating of the rating Agency S&P, in the case of breccia without a deal with the European Union in the state goes into recession that will last four to five quarters. The country’s GDP will decline by 1.2% in 2019 and 1.5% in 2020.

CEO Araknos Investment Managers Roberto d’ambrosio in an interview with RT, suggested that even in the case of an agreement breaksit will be a drag on the UK economy and the EU. The expert believes that the United Kingdom this year may be short of 1.5—2% of GDP, EU — 0,9—1,1% of GDP. Losses will continue in 2020, but on a smaller scale.

“Out of the transaction will have serious consequences. In such a scenario, possible problems in foreign trade. Also increase the pressure from imported inflation (caused by higher prices for imported goods. — RT) due to the possible weakening of the pound sterling and new tariffs on imported goods,” explained Roberto d’ambrosio.

The UK economy came to bracito with worse performance. At the end of last year United Kingdom GDP grew by 1.4%, but this is the lowest level since 2012. Such data are cited by the office for national statistics UK (ONS). In 2016 and 2017, the growth amounted to 1.8%. Before three years, the economy grew at a rate of 2% or more.

In early February the Bank of England lowered its growth forecast of GDP in 2019 from 1.7 to 1.2%. Analysts point out that if this forecast is realized, the country will show the lowest growth since 2009.

Expert on the stock market “BCS” Dmitry Babin in conversation with RT noted that the negative effect of a British exit from the EU — even closing the deal has already affected the economic performance of the country. In this case, soft breccia can even support the economy because it will remove the existing uncertainty.

The UK has started to incur losses even before the official exit from the EU. Member of the monetary policy Committee of the Bank of England Gertjan Blige said that since the referendum in June 2016, the economy lost an additional 2% of GDP. We are talking about a shortfall of revenues of 40 billion pounds per year (or 800 million per week), writes The Guardian.

The EU economy also shows a gradual slowdown. By 2018 the growth of the EU economy amounted to 1.9% compared to 2.4% in 2017. These data are provided by Eurostat.

The European Commission has lowered the forecast of growth of the EU economy in 2019 from 1.9% to 1.5%. In 2020 it is expected a small rise to the level of 1.7%.

The barrier for the automotive industry


Brakcet cancels the free trade regime between the United Kingdom and the EU, reminded the experts.

“Technically the UK is the third country towards the European Union and even to Ireland, which is her backyard. The result is that in trade both parties may appear duties which did not exist before. However, it is possible that London and Brussels will sign a agreement on free trade that the EU has with other countries,” — said in a conversation with RT, the Director of the Institute of trade policy HSE Alexander Daniltsev.

The British government previously announced that in case of withdrawal from the EU without the agreement of 87% of imported goods are exempted from import duties. Under the influence of tariffs will remain part of agricultural production: beef, lamb, pork, poultry and dairy products.

Deputy Director of IMEMO Alexey Kuznetsov argues that as a result of brexia British and European farmers will face new trade restrictions.


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“Britain is no longer a part of the common agricultural policy of the European Union. The EU market is de facto protected from external production parties. Therefore, London will have partly to seek other markets for their goods,” said RT’s Alexey Kuznetsov.

The government noted that London will not remove duties on ready cars. The import of auto parts from Europe for UK plants will remain duty-free.

Duties on cars especially greatly concerned about the German automakers. The number of cars imported from Germany, the United Kingdom ranks first. According to the Association of the automotive industry (VDA), in 2018 the United Kingdom were delivered 666 thousand vehicles. For comparison, exports to the US amounted to 470 thousand cars.

In monetary terms, the exports to the United Kingdom ranks third after the USA and China. Sales last year amounted to €22.5 billion, according to Reuters.

Alexander Daniltsev believes that the basic economic loss to the UK and EU will be linked to the disruption of supply chains and operational linkages. Manufacturers will have to seek new suppliers or face higher prices for components.

Financial impact

RT interviewed experts expect that mostly the result of a British exit from the EU would harm the financial sector of the country.

Roberto d’ambrosio explained that one of the main advantages of the financial sector within the EU — the so-called passport law. Their point is that the financial institution in the territory of one of EU member States, may offer its products and services to all other members of the Union without any restrictions. The companies from the city of London has actively used this rule and their expertise in financial matters, so it is successfully developed.

“Most likely, the Finance company from London not get equal access to the EU market, and it will be harder to compete with representatives of other major financial centers of Europe — Berlin, Paris, Milan, Amsterdam and Madrid. Thus, a British exit from the EU, especially in the absence of the transaction, will have a negative impact on one of the most important engines of the British economy”, predicts Roberto d’ambrosio.

Dmitry Babin noted that the British financial sector contributes 12% GDP of the whole country. In the absence of transaction bracito the industry may face the withdrawal of assets from the global banks and investment companies in excess of $1 trillion, accounting for nearly 10% of the entire banking system of the country.

A U.K.-based financial institutions do not have to put up with the possible deterioration of working conditions and decided to change the place of residence. So, 275 companies from London have brought or withdraw their assets and funds out of the country on the eve of breccia. Such data are cited by think tank New Financial.

The total size of the output from the assets is 900 billion pounds (more than €1 trillion). So, banks, including investment, output 800 billion pounds, management companies have brought more than 65 billion pounds, the insurance company — 35 billion pounds.

About 100 financial institutions moving for work in Dublin, 60 chose Luxembourg, 41 — Paris, 40 — Frankfurt-on-main and 32 — Amsterdam, reports the New Financial.

Alexey Kuznetsov stressed that Dublin is not enough office space that is actively occupied by the former London company. But the economy of Ireland such a scenario is only good.

Meanwhile, the exchange rate of the national currency of the UK shows a mixed trend. “There is speculation on the news about breccia. The fundamental reasons neither to strengthen nor to weaken the pound, not now. First you need to wait for the terms and conditions of a British exit from the EU, then the exchange rate adjustment on objective factors,” — said Alexei Kuznetsov.

Experts believe that a British exit from the EU could also slow down the already declining global economic growth. “It will break the existing balance, increasing the level of uncertainty and speculation in the currency market. The negative impact may reduce global GDP growth by 0.3—0.5 percentage points,” concluded Roberto d’ambrosio.